September 15, 2009 6:18am by David Farrar

Forgetting the margin of error

Big earners are lining up for the Government’s home insulation subsidy, a survey suggests, prompting fears middle income earners will miss out unless the scheme gets more Government money.

An online survey of 1578 homeowners found high earners were twice as likely to want to take advantage of floor and ceiling insulation subsidies under which home owners must pay up to $3500 themselves.

That sounds about right to me. Must untargeted schemes have higher income earners take more advantage of them. This is why I tend to support targeting over universal provision, and why stuff like tax incentives for health insurance tends not to increase the number of people who have health insurance.

The $323 million scheme gives grants of up to $1300 to insulate floors and ceilings in homes built before 2000, and $500 towards a heat pump or other energy-efficient home heating.

The poll suggests about 280,000 home owners may apply – pushing demand well above the four-year target of insulating and improving heating in 180,000 homes.

This is quite possible, but I would be cautious about that figure. The poll is done by the NZ Business Council for Sustainable Development and I suspect those who respond to their polls (done through an online sample, not random phone polling) are far more environmentally aware than the average home owner, and hence more likely to say they are interested in such a scheme.

Homeowners making more than $200,000 a year made up only 1 per cent of respondents, but 45 per cent of them planned to get help with home insulation costs, as did 35 per cent of those making $70,000 to $100,000 and 29 per cent of those on $100,000 and $150,000.

I can not believe they are quoting results for homeowners making more than $200k a year. By their own admission that is 1% of respondents or 16 people. So that figure of 45% has a margin of error of 25.8%.

Those other figures quoted may have very high margin of errors also. Normally I would check the source report but it doesn’t appear to be online yet.